Ross Ulbricht has been sentenced to life in prison and OKCoin’s former CTO has lashed out against his former employer. Here are the cryptocurrency highlights of week 22.
- Former OKCoin CTO Changpeng Zhao has posted a public statement in which he has revealed that the exchange did not only forge a contract, but is also guilty of using bots to manipulate market volumes, operating on fractional reserves, faking its proof-of-reserves and lying to its auditor. The CTO’s signature was also forged on bank transfers, even after he had left the exchange in January this year.
- The events unfolding at OKCoin bring back strong memories of Mt.Gox which went bankrupt last year. The latter platform was also using bots to manipulate markets and trading on fractional reserves. The consequences of this default are still being felt today, as it has led to regulations such as New York’s BitLicense which is still to be implemented. The final version of this regulation was scheduled to be released “by the end of May” and could be unveiled any day now.
- Ross Ulbricht has been sentenced to life in prison for running the online drug market place Silk Road. After the sentence was handed down many observers took to Twitter to share their disappointment with the outcome, but representatives of the US government celebrated its successful case. As Manhattan U.S. Attorney Preet Bharara stated: “Make no mistake: Ulbricht was a drug dealer and criminal profiteer who exploited people’s addictions and contributed to the deaths of at least six young people”.
- Bitcoin blocks are currently limited to one-megabyte in size. This has been subject of debate over the recent weeks, as it means the digital currency is limited to processing roughly seven transactions per second. By comparison, MasterCard processes almost 600 authorizations of financial transactions per second on average. For this reason, Bitcoin core developer Gavin Andresen has argued that it is urgent to increase the maximum block size to at least 20-megabyte. Gavin has now stated that if no consensus can be reached on the matter he will leave the main Bitcoin (Core) implementation and focus on the Bitcoin-Xt implementation, and subsequently lobby at merchants, miners and exchanges to run Bitcoin-Xt.
- The revelations by OKCoin’s former CTO sparked a broad decline across all cryptocurrency markets. Bitcoin is now trading almost three percent of $7 lower than the previous week at a rate of about $233 per coin. Dogecoin is one of the biggest decliners, trading roughly 10 percent lower. Dogecoin had experienced a rally recently, as its value increased by more than 100 percent over the past three weeks.